Currently, the decisions or instructions during operations affecting securities or security orders for holders of securities of a quoted company (the issuer) are executed by transmitting documents via the postal service and, for the most part, by intermediary of financial depository institutions. The sending and receiving of security orders involves several depositories (banks, stock brokering companies) in France and abroad, and several methods of transmission.
The current operating method is thus characterized by the cumbersome nature of document exchanges, often paper, and by the difficulty experienced by the issuers involved in inviting distant or unidentified holders to respond to security offers.
French law makes a distinction between the registered security holder, who has legally or voluntarily accepted to allow his name and contact information to be made known to the issuing company, and the bearer security holder, whose identity can be known only through performing a costly search initiated by the issuer and with a result that is always incomplete. The number of securities held by the bearer security holder and his identity are in fact only known upon his initiative, for example during the receipt by the issuer of a security order concerning, for example, a request to block the shares that will be addressed to his depository.
Although the decisions or instructions transmitted via Internet during the security orders are easily incorporated into the relationship between the issuer and the registered owners known at the outset and to whom a confidential identifier has been sent, it is different for the decisions or instructions of the bearer security holders, who are unknown to the issuer. To be valid, their decisions or instructions must wait to be verified by the banker, the final centralizing unit generally belonging to an organization responsible for the registration of or the compensation for securities (in France, EUROCLEAR).
It should be noted that remote decisions or instructions require the transmission via mail of a form for a decision or instruction by a depository network. The depositories in the network, including the last element of the network, the centralizing unit, validate the response to a security offer which comprises two elements: the number of securities held and the decisions or instructions proposed to and duly selected by the holder. The centralizing unit is generally a member of an institution responsible for the recording of or the payment for securities.